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BSX Progresses on TAVR Trial

Boston Scientific Corporation (BSX - Free Report) is making good progress in the REPRISE II clinical trial. The company enrolled its first patient for the trial, which will evaluate the safety and performance of the Lotus valve system in two sizes (23mm and 27 mm), in up to 120 patients with severe aortic valve disease. The Lotus valve is a transcatheter aortic valve replacement (‘TAVR’) device. The company plans to use these results in order to gain CE Mark and other regulatory approvals.

Encouraged by positive results in the REPRISE I trial, Boston Scientific decided to evaluate the Lotus valve in a larger patient population. Enrollment in the study is expected to be completed in the first half of 2013. Patients with severe calcific aortic stenosis, aged 70 years or older, and those considered to be at high risk for surgery would be enrolled in the study.

The Lotus valve was inducted in Boston Scientific’s portfolio following the acquisition of Sadra Medical in January 2011. Launch of the valve is expected in the second half of 2013, on the receipt of regulatory approval. At the end of the second quarter, the company noted that the cost to bring the Lotus valve to the market would be more than its earlier expectation.

The TAVR business, though promising, is also highly competitive with players such as Medtronic (MDT - Free Report) and Edwards Lifesciences (EW - Free Report) competing to increase their respective market share in Europe.

During the last reported quarter, revenues from interventional cardiology (other than coronary stent systems) business increased 3% at constant currency to $209 million comprising US sales of $78 million and international sales of $131 million. Boston Scientific diversified the portfolio of this business with the acquisition of Atritech, also in 2011. This deal brought in the Watchman Left Atrial Appendage Closure device, which offers an alternative to anticoagulant drugs and is CE Mark approved. The company is working to get the device approved in the US, possibly in 2013.

We have a ‘Neutral’ recommendation on Boston Scientific. The stock retains a Zacks #3 Rank (“Hold”) in the short term.

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